Affordable housing is going to court in Atlanta
In a surprise move, 2020 is finally shaping up to be an interesting one
By King Williams
Welcome to my freemium newsletter by me, King Williams. A documentary filmmaker, journalist, podcast host and author based in Atlanta, Georgia.
This is a newsletter covering the hidden connections of everything in the world of Atlanta from urbanism and gentrification, to politics and entertainment.
On Friday afternoon, to the surprise of many in attendance, including myself, the Atlanta Housing Authority (now known as Atlanta Housing) issued a surprising ‘no’ vote to at their annual board meeting.
The ‘no’ vote was thought by many to be a ‘yes’ vote to end an ongoing legal battle with real estate developer Egbert Perry of the Integral Group. Integral Group and Atlanta Housing for years have been embroiled in a legal battle that was seemingly coming to an end after previously announcing in December a settlement had been reached. As a result of the surprise, the dispute will now move on to court for a judge to settle.
Since 2011, then-Mayor of Atlanta Kasim Reed, Atlanta Housing and Integral Group, the company of Mr. Perry have been in a very public spat regarding the sale of several former public housing sites to Integral Group.
Some of the public housing sites that I was trying to tell the story of for the first edition of my documentary ‘The Atlanta Way’.
“New” Atlanta era of the 2010’s is built on the end of public housing.
The spat between Integral Group and Atlanta Housing is over a disputed 79 acres of land sits on the old Capitol Homes, Carver Homes, Grady Homes and Harris Homes housing projects. The destruction of these housing projects and dozens of others happened in Atlanta from 1994-2011, under the leadership of-then Atlanta Housing Authority CEO Renee Glover.
It was Glover’s nearly two decade run as head of the Atlanta Housing Authority from 1994-2013 that saw the removal nearly all of public housing in Atlanta, becoming the first city in America to do so.
Those housing projects were demolished in pre-recession era Atlanta under the guise of being rebuilt as mixed income residential developments that never materialized.
As a result of the demolitions, these former public housing projects sit on now some of the most valuable portions of the city. Making Atlanta Housing for most of the 2010’s one of the largest land banks in the city, sitting on hundreds of acres of available land.
Additionally, for those residents of the former public housing buildings slated for demolition were given section 8 vouchers and assistance to find residences elsewhere. These vouchers according to studies by Georgia State University sociologist Dr. Deirdre Oakley, merely shifted residents from concentrated poverty to other low-income regions of Atlanta.
Those housing projects were demolished in pre-recession era Atlanta under the guise of being rebuilt as mixed income residential developments that never materialized.
And the adjacent properties around them became catalysts for either large land parcel acquisitions, newer priced developments or sometimes out right gentrification.
What is Integral Group?
Integral Group is an Atlanta real estate development company co-founded and currently led by Mr. Egbert Perry. The group is known for being one of the few successful developers in the affordable housing space.
The group is known by many for their work in Centennial Place and Centennial Elementary, a redevelopment project of the former Techwood Homes housing projects in anticipation of the 1996 Olympics.
Perry is also one of a handful of successful, major league level, Black real estate developers not only in Atlanta but the US as well. Perry’s Integral Group was chosen by Rene Glover to lead several more successful redevelopment projects post-Centennial Place in Atlanta and other states across the US.
Integral Group is also creating a massive new Avalon-Atlantic Station-esque Assembly Yards development in Doraville at the old GM Factory off of the northeast section of I-285 and the Doraville MARTA station.
In 2011, Atlanta Housing struck a deal to give Integral Group a 7-year option to choose to develop several former public housing sites that had been razed during the Rene Glover era.
A deal that had been publicly criticized by then mayor Kasim Reed.
To understand the heart of Reed’s criticism and why 9 years later a dispute is still going on, check out the wonderful ongoing reporting by AJC housing reporter Willoughby Mariano.
According to a 2017 AJC article by Willoughby Mariano:
Six years ago, as the Atlanta Housing Authority CEO was locked in a bitter political feud that would lead to her ouster, Renee Glover struck a deal with the developer who helped her transform the city’s crumbling public housing projects.
AHA gave partnerships led by Integral Group, co-founded by prominent developer Egbert Perry, seven years to decide whether to buy more than 100 parcels of the authority’s land. All of them were at or around apartment complexes he built with $65 million in taxpayer funds and other financing where the projects once stood.
Now, Perry has chosen to buy them, and the authority’s current leadership wants out. The deal does not require Integral to build affordable housing on the parcels, which comprise one-quarter of the authority’s vacant land and have a tax value of $30 million. Perry and Glover told The Atlanta Journal-Constitution that they envisioned market-rate developments, not discounted housing to draw those with lower incomes.
If completed, the agreement would put Atlanta’s housing agency for the poor in the position of subsidizing homes and shopping for the well-off — at a time when the city’s affordable housing is vanishing at crisis rates.
Glover was eventually ousted by then-Mayor Kasim Reed in 2013, who in the process sought to eradicate any previous deals the Glover era Atlanta Housing had. This also included deals like the one given to Integral Group.
Integral Group, went to court against Atlanta Housing to contest that despite the change in leadership at AH, the deal was done. What has resulted has been a legal battle that has been held up in court for years, amounting to $1.8m in court fees for Integral Group and about $1.3m for Atlanta Housing.
And after nearly 9 years of costly court battles, a settlement was agreed upon in December of 2019. A settlement which was to be voted in agreement by the Atlanta Housing board in February 2020. The settlement announcement seen by many to be a done deal until it wasn’t, to the surprise of everyone.
So why are they in such a deadlock over this?
1) Money. The deal is seriously undervalued based on how much shovel ready land is available inside the city, especially on 👇🏽
2) Valuable land. On the southeast portion of Atlanta Beltline, where one of the sites (Carver Homes) in question sits. This gives Integral a key property during one of the hottest real estate markets ever.
3) No mayor wants to say they ended affordable housing. Then Mayor Reed and now Mayor Bottoms can’t take an ‘L’ when it comes to actually giving away affordable housing, especially for two Black mayors in the city of Atlanta. Especially not during Black History Month for Mayor Bottoms.
4) Who actually would get the affordable units. The affordable housing commitment portion of the deal is the biggest point of contention. Critics of the proposed 20% of the proposed units of the developments would be “affordable”, that would be determined by area median income (AMI) rather than actual direct income, how a housing authority would typically operate.
This is criticized by many as being not addressing the affordable housing for those who need it the most, which is the actual purpose of a housing authority and instead is a subsidy for middle class residents feeling the rental squeeze. This combined with a fact that Atlanta Housing hasn’t built any new housing in the 2010's.
5) A lot of money left on table by AH in this deal. Integral Group says the 79 acres in question is $22m, while Atlanta Housing says that is too low and should be at least $60m. For Integral Group, this project is shovel ready and half of the price of Atlanta Housing’s assessed value.
According to the AJC, these sites are nestled near four adjacent Integral Group real estate projects and would benefit from an overall rise in both rents and home prices.
6) Mayor Keshia Lance Bottoms announced in 2019 a $1 billion dollar initiative to build affordable housing in the city.
The hundreds of acres of available land owned by Atlanta Housing, especially those on the south-southeast corridors of the Atlanta Beltline as well as those on the rapidly gentrifying westside would be an easy on-boarding to her goals.
7) Integral Group has experience in doing mixed income housing. Supporters of the deal can point to Integral Group’s experience in developing mixed-income properties and being a pioneer in the affordable housing space.
Also, supporters can point out the current deal also calls for a joint partnership between Atlanta Housing and Integral Group. Atlanta Housing would still have 50% control over the 4 sites as pointed out in this Saporta Report illustration below:
There’s another underlying subtext that’s happening here
In a city with a history of racial politics and classism, 2020 represents a real conundrum.
As the city is gentrifying faster each year, combined with a continuation of overall regional population growth, the notion of what Atlanta is becoming in question both economically and culturally.
2020 Atlanta has more large scaled developments and changes in residential properties than another time in Atlanta’s history since the 1960’s. Combined with a rental market that only has been building over 90% of all new rental properties as luxury housing. Thoughts are creeping in on whether or not Atlanta prices itself out of its own future.
Affordable housing is often misunderstood as public housing projects and blight, when in reality it’s a basic question of economic stability.
As the economic growth concentrates inside or on the border of I-285, the problem of where do people live becomes a threat to the continued economic prosperity of the state. Yes, we need to build more housing but if all of that housing is too expensive for our poor, working and now middle class, we have to start to think about whether “the city too busy to hate” is now the city too expensive to live.